INDIANA, Pa. and CINCINNATI, Oh. - First Commonwealth (NYSE:FCF) Financial Corporation (NYSE: FCF), the parent company of First Commonwealth Bank, has announced an all-stock merger with CenterGroup Financial, Inc., the holding company for CenterBank. The transaction, valued at approximately $54.6 million based on First Commonwealth's closing stock price as of December 17, 2024, will significantly bolster First Commonwealth’s presence in the Cincinnati market.
The merger agreement, which has been approved by the boards of directors of both companies, will result in CenterGroup merging into First Commonwealth, and subsequently, CenterBank will merge into First Commonwealth Bank. This strategic move is set to add roughly $348.4 million in total assets to First Commonwealth’s portfolio, along with three branch locations, a loan production office, and a mortgage office in the Cincinnati area.
CenterGroup shareholders are to receive 6.10 shares of First Commonwealth common stock for each share of CenterGroup common stock they hold. The merger is anticipated to be a tax-free reorganization and is expected to be finalized in the first half of 2025, pending approval by CenterGroup shareholders and customary bank regulatory approvals.
Mike Price, President and CEO of First Commonwealth, expressed enthusiasm about the merger, highlighting the cultural and commercial alignment with CenterBank and the potential for growth in the Cincinnati market. Stewart Greenlee, President and CEO of CenterGroup, also remarked on the shared values and the benefit of expanded banking products for customers and communities.
Financially, the merger is expected to be approximately 2% accretive to First Commonwealth’s earnings in 2025 and about 3% in 2026, with anticipated cost savings fully realized. The estimated tangible book value dilution should be less than 2%, including estimated one-time charges.
Raymond (NS:RYMD) James & Associates, Inc. and Squire Patton Boggs (US) LLP are advising First Commonwealth, while Janney Montgomery Scott and Dinsmore & Shohl, LLP are advising CenterGroup.
The statement released today indicates that this merger is a strategic effort to enhance First Commonwealth's commercial banking operations and customer base in the Cincinnati market. The information provided is based on a press release statement. For investors seeking to evaluate similar regional banking opportunities, InvestingPro offers extensive peer comparison tools and valuation metrics across the banking sector, along with expert analysis through comprehensive Pro Research Reports.
In other recent news, First Commonwealth Financial reported its third-quarter earnings for 2024, which showed mixed results. The company registered earnings per share of $0.31, falling short of analysts' projections by $0.03 due to higher-than-expected provisioning and expenses. However, a slight gain in higher fee income helped offset these discrepancies. Piper Sandler, in response to the earnings, adjusted its price target for First Commonwealth from $17.00 to $16.00 while maintaining a neutral rating.
First Commonwealth's report also revealed a minor decrease in net interest margin to 3.56%, and a rise in net charge-offs and non-performing assets, partially attributed to credits acquired through a recent acquisition. Conversely, average deposits saw a 3.2% annualized increase, while loan balances remained stable. The company anticipates non-interest income between $22 million and $24 million, and non-interest expenses ranging from $67 million to $68 million for the upcoming fourth quarter.
In addition to financial performance, First Commonwealth was recognized as the second-largest SBA (LON:SBA) lender in Western Pennsylvania for the fiscal year 2024. The company also reported customer satisfaction reaching five-year highs and executed share repurchases at an average price of $16.83. These are the latest developments in First Commonwealth's ongoing operations.
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